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Debt Management Plan Pros and Cons |
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Advantages
- You do not have to do any work in relation to your debts, for example, drafting letters to creditors
- There is only one payment to make - to the Debt Management Organisation - and the company distributes the money to the creditors.
- You do not have to pay several different companies. Instead only one payment.
- If the plan is carried out successfully all Interest and charges are usually stopped.
- You only pay what you want to so that you have enough left over for a healthy social life.
- You will no longer need to speak to your creditors in order for debt elimination to take place
Disadvantages
- A lot of debt information is needed.
- Debt Management Plans have no legal standing.
- If your monthly payment is low and your debts are high them you will most likely be in a plan for the rest of your life.
Debt that is not included
Other types of debt that are not included are:
- Secured loans
- Leases (property)
- Hire purchase
- CSA / Maintenance arrears
- Car loans (if secured against the car)
- Rent
- Council Tax arrears
- Student Loan repayments.
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